EPA decision to not finalize RFS volumes 'sorely' disappoints

The U.S. EPA announced Nov. 21 that the agency will not be finalizing the 2014 renewable fuel standard (RFS) volumes before the end of the year, disappointing and baffling both renewable and petroleum fuel producers. “Finalization of the 2014 standards rule has been significantly delayed,” the agency stated. “Due to this delay, and given ongoing consideration of the issues presented by the commenters, EPA is not in a position to finalize the 2014 RFS standards rule before the end of the year. Accordingly, we intend to take action on the 2014 standards rule in 2015 prior to or in conjunction with action on the 2015 standards rule.”

EPA’s proposal last November to lower ethanol blend requirements and stall the biomass-based diesel standard “has generated significant comment and controversy, particularly about how volumes should be set in light of lower gasoline consumption than had been forecast at the time that the Energy Independence and Security Act was enacted, and whether and on what basis the statutory volumes should be waived,” the agency stated. “Most notably, commenters expressed concerns regarding the proposal’s ability to ensure continued progress towards achieving the volumes of renewable fuel targeted by the statute.”

The agency stated it is evaluating these issues in light of the purposes of the statute and the administration’s commitment to the goals of the statute to increase the use of renewable fuels.

“This administration says over and over that it supports biodiesel, yet its actions with these repeated delays are undermining the industry,” said Anne Steckel, vice president of federal affairs for the National Biodiesel Board. “We know that fuels policy is complex, but there is absolutely no reason that the biodiesel volume hasn't been announced. We are urging the administration to finalize a 2014 rule as quickly as possible that puts this industry back on track for growth and puts our country back on track for ending our dangerous dependence on oil. We also urge them to move quickly on 2015 so that we don’t repeat this flawed process again next year.”

Despite record biodiesel production volumes in 2013 far surpassing that year’s RFS mandate of 1.28 billion gallons, the EPA proposed last year to hold the RFS biodiesel volume at the same volume for the 2014-’15 program years.

Lisa Mortenson, CEO of Community Fuels, a commercial biodiesel plant in Stockton, Calif., told Biodiesel Magazine, “EPA’s delay in announcing the 2014 RVO has caused significant damage to the biodiesel industry—margins are deteriorating and demand has softened. Any sustained periods of regulatory uncertainly hurt small and independent producers the most. Companies like Community Fuels are focused solely on producing high-quality advanced biofuels that help clean the air, diversify our energy sources, create family-supporting jobs and stimulate the local economy. In our case, our advanced biorefinery is located in Stockton, Calif.—an area that needs the good jobs and economic stimulus associated with our facility. We believe the good work that we do has strong bipartisan support. We are sorely disappointed that the EPA has not issued RVOs to support the growth of the advanced biofuels industry and that Congress has not reinstated the biodiesel blenders credit. We look forward to both of these issues being resolved so that we can grow our business and increase our production and supply of advanced biofuels.”

Jack Gerard, CEO and President of oil lobby group the American Petroleum Institute said, “It is unacceptable to expect refiners to provide the fuels Americans need with so much regulatory uncertainty. This is an example of government at its worst.”

“The continued delays create great uncertainty for the biodiesel industry and soybean farmers and limits the industry’s ability to invest and expand,” said Ray Gaesser, president of the American Soybean Association. “The proposed rule was unacceptable and would have taken biodiesel backward from the amounts produced and utilized in 2013. However, ASA believes that EPA can and should finalize a 2014 rule that sets the biomass-based diesel volumes at or above the nearly 1.8 billion gallons that were produced and consumed in the U.S. in 2013.”

EPA also stated the compliance demonstration deadline for the 2013 RFS standards will take place in 2015, and the agency will be making modifications to the EPA-Moderated Transaction System to ensure that renewable identification numbers (RINs) generated in 2012 are valid for demonstrating compliance with the 2013 applicable standards. It intends to modify EMTS to permit the trading and retiring of 2012 vintage RINs beyond Dec. 31, 2014. EPA will incorporate the modifications into EMTS version 4.1, which is scheduled to be deployed by April 1, 2015. From Jan. 1, 2015, until the release of version 4.1, EMTS will not be able to support 2012 RIN transactions. It added that 2012 RIN holding data stored in EMTS “is safe and will be preserved even though it will not be accessible during the period from Jan. 1, 2015, until the release of version 4.1.”